IMAGINE ESWATINI WITH GLOBAL COMPANY

I dream of the Kingdom of Eswatini becoming a manufacturing powerhouse within Africa. Imagine that a few emaSwati in power convinced His Majesty the King and Parliament to establish a global company called Eswatini Royal Mining and Steel Company. Imagine that its purpose was to engage in mining and processing some of the minerals discovered in the last few years.

The shareholding would be according to the present constitutional framework, meaning that His Majesty would take 25 per cent and government would take 75 per cent. Please let us not get into any debate about why the King takes 25 per cent because presently that is the law and it further says that his majesty holds these shares in trust for emaSwati as a nation. Let us leave it at that for now and not debate it. EmaSwati will have 75 per cent left to benefit all emaSwati. The present system, where foreign and local companies and investors would apply for a prospecting licence, and eventually mining licence would continue as is.

The Parliament, which represents the people of Eswatini, would present and pass a special bill to establish this company and a bill to fund it with one billion Emalangeni annually as capital and give it the powers to compel a percentage say 10 per cent annually of the pension funds to be invested in it. Our pension funds hold over E27 billion. This money should not be a gift from the pension funds or government, but an investment with agreed returns. The Board of directors would be taken from the best minds emaSwati can offer. EmaSwati have managed large corporations in South Africa and the world. The management team must be sourced locally and internationally through competence, experience and qualifications.

The mandate must be clear, to create an international company capable of competing globally within thirty years.  This company must have a long-term  (thirty years) goal to become one of the leading international companies coming out of Africa. This company must open mines, not to sell the minerals to the world, but to process them locally into finished products and then sell them internationally. The company must have various divisions and departments. Let me give an example of iron ore, coal and gold.

Iron ore and coal  

It has been established that we have iron ore deposits in the kingdom. We must not make the same mistake our fathers did and mine all the iron ore deposits for export as ore. We need to endeavour to create finished high-value products. One of the finished products of iron ore is steel and stainless steel. Both these products require high heat, which is obtained from coal. Automotive steel, for example, refers to the different types of steel that are used in the manufacturing of various vehicle components.

It usually requires raw materials, which are iron ore and coal, to melt in a blast furnace to produce molten iron. We have both minerals in abundance. If we can achieve the first goal of producing automotive steel for the international market within the first five to ten years, we will have achieved a lot. Stainless steel would follow in five years. The next stage would be the moulding of the steel into finished products and selling internationally as actual finished automotive steel and stainless steel products.  The company can partner with the international vehicle manufacturing industry to supply a variety of parts or simply employ international engineers like Hyundai did when they broke away from Ford Motor Company in 1968. We could proactively approach companies like Bosch of Germany, which is the world’s largest automotive supplier, and Denso, the world’s second-largest. We have iron ore.

The global automotive steel market is expected to grow from US$107.81 billion in 2022 to US$113.76 billion in 2024, at a compound annual growth rate (CAGR) of 5.5 per cent. These are billions of Dollars, not Rands or Emalangeni, and if Eswatini captured just one per cent of this market, we would have at least one billion dollars or 18.6 billion Emalangeni annually as part of our income. The automotive steel market consists of the sale of various car parts including, wheel rims, exhaust pipes, bushings, bearings, chassis, exhaust systems, radiators and automobile frames. The employment benefits are huge. Hyundai Motor Company of South Korea employed about 295 000 employees in 2023. If our local company were to get just 10 per cent of that number, we would have employed approximately 30 000 emaSwati, which is the size of our civil servants presently.

Our gold is our future wealth  

We can mine our gold, process it into gold bars, and simply increase our gold reserves. Gold mining is a difficult and expensive process, but it is worth it for the future generation. Gold is the best way to store wealth, because the price of gold continues to grow every year. Yes, there may be some fluctuation, but gold prices have consistently gone up. It may also protect our currency whenever we feel we need to delink from the rand or simply to secure our future as a nation. Gold can also be used as collateral for international loans for development, but ban selling.  

The usual story by the economist
The Africans have been sold the idea that we have to privatise all industries and have small governments, whose main function is to facilitate the smooth running of private business and not get involved in any way. We have been told that investors will then come in numbers and unemployment will be a thing of the past. These investors will pay taxes and the country will become rich. To be honest, this model has failed, as there a no real big investors and unemployment is at its highest level. Maybe it is time we change the development model that requires emaSwati to sit and wait for the big, industrialised nations to come and invest. We have offered all kinds of incentives, but nothing has changed. We now offer factory shells and all kinds of assistance to attract these so-called foreign direct investors, but nothing much.  There was a time when most African countries, including Eswatini, offered tax holidays to attract investors. Indeed, corporate tax continues to drop.

Even when they came and invested after the end of the tax holiday, they left or changed names and started the tax holiday again. Africa has a young population, and we need to find new ways of creating employment fast, because the present economic models are not working fast enough. What is certain, is great discontent within the younger population lead to more political unrest and civil wars. Comments: septembereswatini@gmail.com.

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